Audit 52823

2022-001 - Internal Control over Financial Reporting ? Lack of Segregation of Duties ? Significant Deficiency Condition & Criteria: The small size of the Township?s office staff does not allow for adequate segregation of duties. Standard practice regarding the design of a good system of internal controls relies at least in part on a system of checks and balances accomplished by having different employees performing various functions within the accounting cycle. These checks and balances are not possible when the same person performs all of an interrelated series of tasks. Although the Township does have some compensating controls in place, there are still a number of situations where one person is responsible for all aspects of a transaction. Effect: The condition could result in errors being made in the accounting records and going undetected due to the lack of ?cross-checking? and could result in the undetected misappropriation of Township assets. Cause: The size of the Township, and its budget, make it impractical for the Township to hire the additional personnel needed to provide for optimum segregation of duties. Recommendation: The division of duties that does exist among the office staff is considered a compensating control, as is the close involvement of the Board of Supervisors in the financial transaction and reporting process. We urge the Board to continue their close involvement in all financial aspects.

2022-002: U.S. Department of Environment Protection ? Assistance Listing # 66.460 Non-Point Source Implementation Grants Lack of Segregation of Duties ? Significant Deficiency Condition & Criteria: The condition reported as item 2022-001 above also applies to the Township?s internal control over compliance with the requirements of federal programs. Effect: This condition could result in instances of noncompliance with requirements not being detected or corrected on a timely basis. Cause: Although the Township has been able to institute an additional layer of controls over its federal program expenditures, the Township?s small size and limited staff does not allow for it to have the checks and balances over the reporting and cash management functions that would be present in an ideal set of controls. Recommendation: The division of duties that does exist among the office staff is considered a compensating control, as is the close involvement of the Board of Supervisors in the financial transaction and reporting process. We urge the Board to continue their close involvement in all financial aspects, including those related to the federal programs.

2022-001 - Internal Control over Financial Reporting ? Lack of Segregation of Duties ? Significant Deficiency Condition & Criteria: The small size of the Township?s office staff does not allow for adequate segregation of duties. Standard practice regarding the design of a good system of internal controls relies at least in part on a system of checks and balances accomplished by having different employees performing various functions within the accounting cycle. These checks and balances are not possible when the same person performs all of an interrelated series of tasks. Although the Township does have some compensating controls in place, there are still a number of situations where one person is responsible for all aspects of a transaction. Effect: The condition could result in errors being made in the accounting records and going undetected due to the lack of ?cross-checking? and could result in the undetected misappropriation of Township assets. Cause: The size of the Township, and its budget, make it impractical for the Township to hire the additional personnel needed to provide for optimum segregation of duties. Recommendation: The division of duties that does exist among the office staff is considered a compensating control, as is the close involvement of the Board of Supervisors in the financial transaction and reporting process. We urge the Board to continue their close involvement in all financial aspects.

2022-002: U.S. Department of Environment Protection ? Assistance Listing # 66.460 Non-Point Source Implementation Grants Lack of Segregation of Duties ? Significant Deficiency Condition & Criteria: The condition reported as item 2022-001 above also applies to the Township?s internal control over compliance with the requirements of federal programs. Effect: This condition could result in instances of noncompliance with requirements not being detected or corrected on a timely basis. Cause: Although the Township has been able to institute an additional layer of controls over its federal program expenditures, the Township?s small size and limited staff does not allow for it to have the checks and balances over the reporting and cash management functions that would be present in an ideal set of controls. Recommendation: The division of duties that does exist among the office staff is considered a compensating control, as is the close involvement of the Board of Supervisors in the financial transaction and reporting process. We urge the Board to continue their close involvement in all financial aspects, including those related to the federal programs.